Malingering, the Gray Area in Workers’ Comp Fraud

Nearly 25% of all lost-time workers’ compensation claims are exaggerated, according to the National Insurance Crime Bureau.

While only a small percentage of workers’ comp claims are fraudulent, quite a few claims include employees staying away from work even after they’ve been cleared to return by their doctor and when they feel able to work. The term for this is malingering.

When injured workers malinger, the claim lasts longer than the medical disability. The employee has recovered enough to return to work, but has not returned to work.

This can be due to employee intent, medical provider lack of knowledge about the job requirements, employer disinterest, or other reasons. As you can see, it’s not always the employee’s fault.

However, some people take advantage of the system by:

• Staging accidents
• Faking injuries
• Claiming that an injury sustained while not at work occurred on the job
• Inflating the degree of an injury to get more time off from work
• Claiming that an old injury is a new work-related one
• Pretending they are injured more seriously than they are
• Staying on benefits and away from work even after the worker has healed (malingering)

Here are 20 indicators of malingering or fraud:

1. Tips from neighbors, relatives, friends or co-workers that a claimant is actually more active than alleged.
2. The injury coincided with a company’s reduction of the workforce.
3. Nurse case manager, doctor and therapist report a healthier and more active claimant than what is alleged.
4. The lack of organic basis for the disability; most of the complaints and allegations are subjective.
5. Premature or excessive demands for compensation.
6. The claimant works in a seasonal occupation.
7. The claimant often misses their therapy and/or doctor appointments.
8. Having “dueling doctors,” with one physician stating that the claimant is disabled while another reports a completely different prognosis indicating they are not disabled.
9. No witnesses to the reported accident.
10. The claim was reported after the claimant was terminated, suspended or had resigned.
11. The claimant had only been employed for a short while when the alleged accident occurred.
12. The claimant is often not home when you try to contact them.
13. The claimant is disabled longer than is normally associated with the reported injury.
14. The claimant has a history of workers’ comp claims or short-term employment.
15. The claimant’s job performance has been below average, or they were disciplined at some point.
16. The claimant’s Facebook or other social media page shows they are more active than they claim they can be.
17. The claimant has financial problems.
18. The course of treatment seems to be too much for the injury, like extensive treatment and testing for a minor injury.
19. If it was a car accident, the damage to the vehicle is inconsistent with the claimed injuries.
20. Documentation of treatment is suspect – for example, photocopies of bills, no record of dates of treatment, no itemisation.

While some of these red flags don’t necessarily mean that there is fraud or malingering, if you do suspect it, you should contact the claims administrator handling your employee’s case.

If you can provide evidence to back up your suspicions, the insurance company may initiate an investigation that could include surveillance. All workers’ comp carriers are required to have fraud units, as per state regulations.